Factors affecting adoption of e-trading practices by Sri Lankan stock market industry

Abstract

Information technology and e-commerce based activities are popular in the contemporary' world. Interest in applying e-commerce to the various aspects of business activities increasing in the Sri Lankan context. In 2004 the introduction of e-commerce to the Sri Lankan stock market took place by introducing the e-trading practices, the Internet based stock trading activities. Since then, as an industry, e-trading practices have been improving gradually with the participation of investors and stock brokering firms. The study focused analyzing the current situation of the e-trading practices and finding the significant factors that affect the adoption of e-trading practices from the perspectives of Internet stock trading investors and stock brokering firms. The analysis was carried out by using qualitative and quantitative methodologies. In order to find the adoption factors from the investor perspective, it used 3 factors extracted from the well known technology adoption based theories known as theory of planned behavior (TPB) and technology acceptance model (TAM). These 3 factors were: (1) Attitude, extracted from TPB, (2) subjective norms, extracted from TPB and (3) perceived ease of use, extracted from TAM. It was found that both theories in common pointed out that the above factors directly affected the behavioral intention and encouraged individuals to adopt the technology. Apart from the above three variables that affected the behavioral intention, the researcher picked up perceived benefit and perceived trust from the past empirical studies. According to the past empirical research findings, the researcher was able to identify five factors that may affect the adoption of e-trading practices of broker companies namely, organizational readiness, relative advantage, demand, network readiness and regulations. Based on the 380 questionnaire responses collected from the Internet based stock trading investors, it was revealed that all five variables significantly affected the adoption of e-trading practices of individual investors. The 26 questionnaire responses collected from the Internet trading stock brokering firms reflected the fact that out of the above five factors organizational readiness and demand were significant for the adoption of e-trading practices by stock brokering firms. Findings of this study results show that authorities should encourage Internet stock trading by enabling brokering firms to adopt e-trading practices as much as possible which will then attract more and more investors to participate in stock trading which will finally be helpful for the betterment ofthe industry and as well as for the betterment ofthe country as a whole.